Bond yields increase once again

Thursday, 20 February 2020 00:31 - - {{hitsCtrl.values.hits}}

DOD buys back bonds

By Wealth Trust Securities

The secondary bond market yields were seen increasing once again yesterday mainly on the liquid maturities of 2024’s (i.e.15.06.24 & 15.09.24) to intraday highs of 9.80% and 9.77% respectively against its opening levels of 9.57% each. In addition, maturities of 2021’s (i.e. 01.03.21 & 01.08.21), 15.05.23, 01.08.24, 15.10.27, 01.09.28 and 15.01.33 were seen trading within the range of 8.65%, 8.90%, 9.38% to 9.40%, 9.70% to 9.80%, 9.85%, 9.97% to 10.11% and 10.02% respectively as well. In secondary bills, February 2020 maturities changed hands at levels of 8.55% to 8.61%.

The total secondary market Treasury bond/bill transacted volume for the 18th of February 2020 was Rs.30.68 billion.

In the money market, the net overnight liquidity surplus in the system stood at Rs.22.34 billion yesterday as the weighted average yields on call money and repo recorded 6.99% and 7.06% respectively. The Domestic Operations Department (DOD) of the Central Bank of Sri Lanka was seen infusing liquidity by way of outright purchases of Treasury bonds for the first time since 05th December 2019. Against an total buy back amount of Rs.12 billion on three 2024 maturities, it infused amounts of Rs.3.45 billion and Rs.5.50 billion on the maturities of 15.06.24 and 15.09.24 respectively at weighted averages of 9.63% and 9.68%, valued today.

Rupee dips to 181.96

The continued demand by banks saw the USD/LKR rate on spot contracts dip to a low of Rs.181.96 before closing the day at Rs.181.90/00 against its previous day’s closing of Rs.181.62/70.

The total USD/LKR traded volume for the 18th February 2020 was US $ 125.65 million.

Some of the forward USD/LKR rates that prevailed in the market were 1 Month - 182.45/60;

3 Months - 183.50/70 and 6 Months - 185.05/35.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)

Given below are the closing, secondary market yields of the most frequently traded T – bills and bonds,